LON CARROLL { Money for all! }

San Francisco Chronicle ^ | 10/30/8 | Jon Carroll

[SmithL]

You may have read that the Bush administration is seriously considering giving taxpayer dollars to the Big Three automakers. This would be an extension of the Great Bailout of 2008, which started with banks and brokerage houses and spread to at least one insurance company. The auto companies are arguing that they deserve money too because they all have financing subsidiaries that provide money for car loans, and these subsidiaries are being hurt by the credit crunch as much as other lending entities.

Which is, of course, true, but: please. The auto companies are not in trouble because their auto loan business is turning sour; the auto companies are in trouble because people don't want to buy their cars. This has been true for some time, but the auto executives have been ignoring the writing on the wall, or rather the great screaming letters on the billboards.

Decades ago, the Japanese had an idea - build cheap, reliable cars that got good gas mileage. Years went by, and auto shoppers read the reports by the consumer groups and car comparison services, and by golly, the Japanese did what they said they were going to do. Turned out some people liked cheap cars, because the cheapness of the car saved them money. See, this is not rocket science, market-analysis-wise. And they really liked reliable cars, cars that didn't break down and cost them more money.

You'd think the auto executives would have paid attention to that, but they were just sure that America's love affair with the car and brand loyalty and fascination with gadgets, particularly big gadgets, would trump common sense. But it didn't!

[ryan71]

Hey, it takes a lot of money to pay for those sweet union benefits/retirement plans.